Lenihan enjoys my full confidence, says Cowen

TAOISEACH Brian Cowen has expressed complete confidence in his Finance Minister Brian Lenihan despite the failure to detect a e7 billion window dressing of Anglo Irish Bank’s accounts.

He said the autumn transactions between Irish Life and Permanent and Anglo were being investigated by the Financial Regulator’s office and had no bearing on the Government’s decision to nationalise the bank last month.

And he said the fact that Mr Lenihan had not read the 120-page report on Anglo had not compromised his position in the Department of Finance.

“Brian Lenihan enjoys my full confidence and the confidence of Government,” he said.

The Taoiseach rejected calls from Fine Gael leader Enda Kenny for Mr Lenihan to be replaced as an “act of patriotism”.

Mr Kenny said such a move was needed to restore confidence in the system.

Mr Cowen said IL&P’s lodgement of e7bn, to improve Anglo’s end-of-year position, was not highlighted in PricewaterhouseCooper’s initial overview of the banks and there was no negligence on behalf of Mr Lenihan.

“There was six volumes of this report. In the overview report there was no mention of this issue. There was no mention of this issue in the detailed briefings by PricewaterhouseCoopers to the minister or the department regarding risk factors.

“It was an issue identified by the department officials when they went through the detailed report and they referred to the Financial Regulator themselves,” Mr Cowen said.

Last night Mr Lenihan told RTÉ he would not resign.

He said having re-read the relevant section of the PwC report yesterday the inter-bank transaction was only detailed on one page.

“I read many parts of this report and I was briefed on many parts of this report .... [the issue in question] which contains highly technical information and the nature of the transaction wouldn’t be apparent on its face.

“You would have understood what it was saying but it would take a lot more building blocks to put it together,” he said.

Mr Cowen said the discovery of the circular transfers between two IL&P entities and Anglo had no bearing on last month’s decision to nationalise the bank.

“The important point is that it doesn’t affect the decision that had to be taken because of the governance issue that were arising.”

When Mr Lenihan announced the nationalisation of Anglo in January he said he had to act because of a significant reduction of its deposit base, as well as the governance issues.

Earlier this week, Mr Lenihan said he learned of the IL&P transfer before the decision to nationalise.

Both the Taoiseach and Mr Lenihan said their priority was to introduce a new regulatory system.